Towards the next generation: delivering affordable, secure and lower emissions power
On 10 April 2017, the Minister for the Environment and Energy, the Hon Josh Frydenberg MP, asked the Australian Energy Market Commission (AEMC) and the Climate Change Authority to jointly provide advice on policies to enhance power system security and to reduce electricity prices consistent with achieving Australia’s emissions reduction targets in the Paris Agreement. In developing its advice, the Authority and the AEMC were asked to draw on existing analysis and review processes and be informed by independent modelling.
Emissions reduction policy in Australia has been marked by frequent changes of direction and uncertainty in recent years. Furthermore, energy and emissions reduction policies have been largely pursued as separate agendas. In the AEMC and the Authority’s view, this lack of cohesion between energy and emissions policy has placed considerable pressure on the National Electricity Markets (NEM’s) ability to supply secure and low cost electricity for Australian businesses and consumers.
The policy advice provided in this report is intended to provide a platform to underpin the better integration of energy and emissions reduction policies in the future, to provide greater investment certainty and in doing so, help keep electricity prices as low as possible while enhancing power system security.
Submissions have been received from interested organisations and consultation is now closed.
The Authority and the AEMC have prepared this review report with the aim of informing the Independent Review into the Future Security of the National Electricity Market and the Commonwealth Government’s 2017 review of climate change policies.
The Authority and the AEMC commissioned the Centre for International Economics to review recent economic modelling exercises and to provide advice on the costs associated with ongoing policy uncertainty for investment in energy.
The Centre for International Economics report: Review of economic modelling exercises & assessment of the impact of uncertainty (PDF 641kB)